Miami’s real estate market remained red-hot during the three months through June as the work-from-home lifestyle fueled by the pandemic left buyers having to pay record prices as they sifted through a short supply of homes.
The number of sales closed in Miami Beach spiked 68% from the first quarter to 2,393, according to the Elliman Report. Closings were up 378% from the year-ago period when the market was impacted by lockdowns aimed at slowing the spread of COVID-19.
"The market is getting more intense than last quarter," said Jonathan Miller, CEO of New York-based real estate and consulting firm Miller Samuel. "Low supply meets heavy demand, and that's being fueled by a number of things, primarily low rates and additional options for remote work."
Florida, and Miami in particular, has become a sought-after destination for Americans to move to as the pandemic has given many the opportunity to work remotely.
That freedom and ultra-low interest rates have helped boost prices in the Miami metropolitan area, which is the eighth-largest in the country. The region is made up of places like Miami, Fort Lauderdale, West Palm Beach and Boca Raton.
Miller said that nearly every aspect of the market is setting records, including prices and the number of sales all while inventory is at an all-time low.
On paper, the median sales price fell 5.2% from the prior quarter to $635,000, which Miller says was due to low inventory and a shift in the mix in some submarkets.
As evidence, the median single-family home price fell 9.5% to $2.055 million, but the average price per square foot ticked up 0.7% to $1,117. The median sales price for condos rose 5.9% to $540,000.
There were 3,534 active listings at the end of the quarter, equaling 4.4 months of supply. That number was down 55% from the 9.7 months of inventory at the end of the first quarter and 89% below the 38.3 months supply a year ago.
The data did not reflect any fallout from the collapse of the Champlain Towers South condo building in Surfside, which happened a week before the quarter ended. Any impact will likely be felt in the current quarter.
Markets elsewhere in the Miami metro area were also strong as buyers were left to sift through low supplies while paying record prices.
The path forward for Miami’s housing market is unclear as the pandemic moves further into the rearview mirror, according to Miller.
"I don't think the intensity that we're seeing now is necessarily sustainable, because some of it's being driven by low rates," Miller said.
"But in many ways, a lot of these markets in Florida are being reset," he added. "It's a new form of demand aside for mortgage rates, which would be doing the calculus for remote and where people want to live. So I think that it’s all in flux."